FSL Trust sees improved tanker markets

May 10 2019

FSL Trust Management (FSLTM), as trustee-manager of First Ship Lease Trust, has announced that the Trust generated revenue of $19.1 mill for the first quarter of this year, a 13.3% increase compared to 1Q18.

The higher revenues were mainly due to firmer rates earned from the Trust’s crude oil tankers and product tankers, which were positioned to benefit from the market’s improvement.

Despite continued market volatility during the quarter, the Trust reported a net profit of $3 mill, compared to $0.9 mill in 1Q18.

The Trust continued to generate positive cash flows from operations of $9 mill in 1Q19, compared to $7.2 mill in 1Q18.

In line with its ongoing fleet renewal strategy, the Trust announced in April, 2019 that the sale of the MR ‘FSL Hamburg’ was successfully completed. Proceeds of the sale were used towards repayment of the Trust’s outstanding bank debt and the balance will be used to partially fund the newbuilding acquisition announced in December, 2018.

As at 31st March, 2019, the Trust’s term loan facilities total stood at $93.2 mill together with the convertible bond at $7.25 mill (face values).

The Trust also announced on 8th February, 2019 a bridging loan agreement of $25 mill with sponsor FSL Holdings, to partially finance the new shipbuilding contracts for FSL-28 Inc and FSL-29 Inc. The first drawdown of $10 mill was used to facilitate payment of the first instalment to the shipyard of $9.8 mill on 13th February, 2019.

Commenting on the results, CEO Roger Woods, said: “We are pleased with the positive start to the year for FSL Trust. We have improved our operational performance and continued to generate profits and positive cash flows even amid volatile market conditions. The successful disposal of ‘FSL Hamburg’ and the newbuilding orders will enable us to strengthen our fleet as the market recovers, positioning the Trust for its long term and sustainable future.

“We remain committed to optimising our capital structure while focusing on operational efficiency, in order to rebuild the business and return value to our unitholders,” he said.

Stathis Topouzoglou, the Trust’s Chairman, added: “The Board has continued to work closely with the management team to improve the Trust’s financial standing and operations and we are pleased with the progress made and results achieved during the quarter.

“Following the results of the EGM held in April, we look forward to concluding the preferential offering, which is in line with the Trust’s strategy of making the necessary investments for long term value creation and ongoing sustainability. We will continue to explore strategic initiatives to position the Trust ahead of the opportunities that the present environment may offer.”